[The Editors' Verdict] The Essence Is a 'Failed Stock Manipulation'

Everyone Repeats Victim Claims
Lawsuit Battles and Public Opinion War Obscure the Essence

After graduating from college, Kang Hyun-soo, who had been living without a decent job, invested in stocks to change his miserable life in one shot but ended up broke. Filled with determination, Kang studied stocks day and night and finally made a huge profit. However, it turned out to be a stock targeted by a manipulation group. Having ruined their operation, Kang Hyun-soo was kidnapped and, after a life-or-death test, got entangled in a 60 billion won scheme.

This is the plot of the movie "Jakjeon (The Scam)," released in February 2009. The forces involved in the scheme show a ruthless side with no regard for blood or tears when it comes to money.

As of 2023, a scandal involving suspected stock price manipulation related to Soci?t? G?n?rale (SG) Securities has unfolded, more dramatic than any movie. It involves meticulous price manipulation over two to three years, multi-level recruitment of investors, appearances by famous celebrities, businesspeople, and wealthy professionals, and leveraged investments using Contracts for Difference (CFD), making it a fascinating case.

The key figure in this suspicion, Ra Deok-yeon, CEO of H Investment Consulting, who revealed that the total investment including leverage was about 2 trillion won, admits to illegal discretionary trading but denies collusive trading. Meanwhile, he pointed to Kim Ik-rae, chairman of Daou Kiwoom Group, as the main culprit behind the stock price crash and announced plans to file a lawsuit for damages. Kim Ik-rae’s side filed a complaint with the police, claiming Ra’s allegations were defamatory falsehoods. Law firm Lee Kang-eun, representing about ten victims, filed a complaint with the Seoul Southern District Prosecutors' Office against the stock manipulation gang on charges including fraud, tax evasion, and violations of the Capital Markets Act. Singer Lim Chang-jung and others also claim, “I am also a victim who lost money.”

The situation has turned into a battle of accusations, with no clear perpetrator and everyone claiming to be a victim. As media competition intensifies, all sorts of rumors are rampant. This risks obscuring the essence of the case as a “failed stock manipulation.” Although the investigation has not yet fully begun, the public’s attention is more focused on the every move of the characters involved than on the truth of the case. At least, the Financial Services Commission and the Financial Supervisory Service deciding to unify communication channels through a joint investigation team with the prosecution is a wise move to prevent confusion.

The joint investigation team must focus on the core issue of “stock manipulation” and thoroughly uncover the causes, progress, main perpetrators, and accomplices of this incident. Only then can they gain experience to prevent similar or upgraded crimes and prepare countermeasures.

In fact, this incident resembles the “Lubo Incident” of 2007. At that time, the stock manipulation group gradually raised stock prices to evade regulatory scrutiny and recruited investors through a multi-level scheme. Subsequently, the Korea Exchange strengthened regulations to designate stocks with prolonged steady price increases as suspicious. However, the manipulators were once again one step ahead of the authorities. They raised prices more slowly and for a longer period, and exploited the loopholes of Contracts for Difference (CFD), an over-the-counter derivative product that allows high leverage while keeping investor identities less visible.

On the 2nd, the Financial Services Commission held a meeting with executives from the Financial Supervisory Service and the Korea Exchange, announcing plans to swiftly investigate the stock manipulation allegations, clearly reveal the methods and collusion of those involved, and thoroughly improve systems such as Contracts for Difference (CFD) where reforms are needed. It is hoped that proper measures will be taken to prevent another “flyer above the runner” from staging another scam. The English title of the movie "Jakjeon" was also "The Scam."

This content was produced with the assistance of AI translation services.